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Education Loan for Bachelors

Updated on Nov 15, 2022

The highest return on investment is knowledge! And obtaining the information at a top-tier and premium university is certain to propel your profession to the next level. However, the terrible fact is that attending a reputable institution generally comes with a high price. Studying at a reputable institution in another country is much more costly.

Pursuing an international bachelor degree from an international institution not only broadens your professional options, but it also provides you with a once-in-a-lifetime experience. With the growing number of students interested in studying abroad, the majority of students are contemplating asking for an overseas education loan to help them pay for their bachelor's degree at an international university.

Foreign education loans are available from a variety of financial institutions in India and abroad. Private banks, nationalized banks, international lenders, and non-bank financial companies (NBFCs) all provide education loans to study in another country.

Table of Contents

1 Eligibility

Public and private banks, as well as other financial institutions, have stepped in to provide Education Loans to students from all walks of life who want to pursue their dream of studying abroad.

NFBCs, on the other hand, have established stringent eligibility requirements, which students must meet to qualify for an Education Loan. The first and most important factor to evaluate is whether or not you are eligible to apply for the loan.

2 Loan Amount

Students can qualify for secured education loans for up to INR 1.5 crore. Students can apply for study loans of up to INR 45 lakhs in international education loans without collateral. Depending on the profile of the applicant and co-applicant, applicant's country, course, and other factors, the loan limit may increase or decrease.

SBI, a nationalized bank, approves loans up to 70% of the collateral value, while Bank of Baroda approves loans up to 100% of the collateral value. Private banks, such as Axis Bank, grant school loans worth up to 65-70 percent of the collateral, albeit at a higher interest rate.

3 Interest Rates

The interest rate is quite important in any loan transaction. The process of acquiring an overseas education loan is no exception in this case. The majority of loan applicants decide to take out an education loan based on the interest rate of the lender's foreign education loan. When it comes to choosing a lender for an overseas education loan, the interest rate is typically the most important factor for students. It's crucial to note, however, that interest rates on international education loans vary based on a number of factors. This article aims to shed light on these aspects as well as give a current list of education loan interest rates from various types of lenders.

4 EMI Calculator

The EMI Calculator is a quick computer tool that allows you to calculate your education loan's Equated Monthly Installments (EMI).

While the traditional and standard technique of calculation is tedious, time-consuming, and arbitrary, with online EMI calculators the activity is completed fast, accurately, and with little inputs.

5 Loan Process

From application through approval and distribution, the entire loan process takes time, so applying for a loan ahead of time is always a good idea. Follow these steps to apply for a student loan:

  • Check with your bank to verify if the course you want to take is approved.

  • Determine how much of a loan you'll require and how much you can acquire on your own.

  • Compare the student loans available for studying abroad from several banks and select the one that best meets your needs.

  • Once you've settled on a bank and a loan amount, fill out the loan application form and deliver it to your bank.

  • As soon as your loan is approved, the bank will provide you with a loan.

6 Documents

Before applying for a study loan in another country, the applicant must have a complete grasp of the documents required. You'll need the following papers to apply for an education loan to study abroad:

  • Application form completed

  • Photographs of the applicant and the co-applicant (passport size).

  • Photo identification is required for both the applicant and the co-applicant. A PAN card, a driver's license, a voter ID card, an Aadhar card, or a passport can all be used.

  • Proof of residency for both the applicant and the co-applicant

  • Documents from the academic world:

  • The applicant's mark sheet and certifications

  • GRE, GMAT, TOEFL, IELTS, etc. mark sheet (score report), whichever is applicable

  • Admission evidence is a letter from the university or college confirming your acceptance.

  • Statements of account: The previous six months co-bank applicant's statements

  • Evidence of income: The co-proof applicant's of income.

  • The following papers are necessary in the event of collateral (immovable property), which might be an apartment, a house, or non-agriculture land:

  • Deed of Title to Real Estate

  • NOC for the building plan has been authorized.

7 Tax Benefits

Taking out a student loan has several benefits! You may be eligible for tax benefits while repaying your college debt. After receiving a loan approval for your education, you are eligible for tax advantages from the IRS.

Section 80E of the Income Tax Act of 1961 gives various tax advantages for a loan utilized for higher education. Because the full interest may be erased, the loan's effective cost is decreased. Both the applicant and the co-signer are eligible for this benefit. The entire cost of the education loan might be decreased in this way.

8 Repayment

Applicants can repay their study loan in a variety of methods, all of which are accepted by every bank. Some loans, such as study abroad loans, have onerous repayment restrictions. It is simpler for applicants if they have a better awareness of their student loan repayment alternatives. Here are some possibilities for repaying your loan:

Repay your education loan using a check or a demand draft (DD repayment)

Repayment of in cash

ECS/NACH (automated EMI payments) for student loans

9 Loan Providers (banks, private companies, NBFCs)

Studying abroad is a dream come true for many students. Furthermore, if you are an out-of-state or international student, your costs will be much higher. Therefore, researching Overseas Education Loans options becomes increasingly important. All financial organizations, such as public and private banks, as well as NFBCs, offer loans for international study.

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